The main difference is that affiliate marketing focuses on third-party brand advocates to direct customers to your company for a flat fee. Both affiliate links and referral links are used to track any new customers or sales that come from a program participant. As soon as an affiliate or customer signs up for your program, they get a unique link that they can use to invite others to visit your website or product page. In general, referrals bring customers that provide long-term value, while affiliates help achieve short-term goals.
While combining bonuses and recommendations may seem like the obvious solution, it’s still a good idea to look at both programs from cover to cover and draw your own conclusions. In contrast, a referral marketing advocate recommends your brand to a colleague, friend, or family member. The motivation is based more on a strong relationship between the lawyer and the potential client. However, offering referral rewards helps attract referrals and should not be discounted.
Second, since affiliate programs are still a form of traditional advertising, keeping an eye on your marketing budget is a must. When someone buys a product or service via an affiliate link, the affiliate receives a commission. In affiliate marketing, the advertiser does not personally know the consumers to whom the affiliate refers a product or service. In affiliate marketing, an affiliate can use various channels to promote a product or service.
Affiliates receive a commission for sales, subscriptions, or other desired actions that consumers take via their affiliate link. It’s also common for affiliates to receive a free product in addition to their cash compensation, especially if they’re performing well or have been associated with the company for a while. When it receives a new sale via a specific affiliate link, the company automatically compensates the affiliate (called Amazon Associates) with a percentage of the sale. Many affiliates write articles that compare different subscriptions offered, often with affiliate links for each company, which increases competition.
In most cases, affiliate programs require potential partners to go through an application process that determines whether they are a good fit for them or not. Another big difference between an affiliate program and a referral program is the type of relationship between the person making the referral (the affiliate or customer) and the person the company is referred to (the potential new customer). Referral programs typically take a more direct approach, whereas affiliate programs rely on people landing on an affiliate site. Affiliate marketing, also known as partnership marketing, is when an affiliate promotes products from other companies.
And although affiliate and referral marketing share the same goal of getting referrals through incentives, they target different audiences with different types of rewards.